Watch this space: as Swatch Group pull out of Baselworld, what's the future of the famous fair?
Twenty years ago, Baselworld, the annual watch and jewellery trade fair were holding seminars confidently predicting the end of bricks and mortar shops within a few years. What they didn’t predict was what the internet might do to the trade fair itself.
Just as the Swiss industry has settled on the shores of its splendid lakes for summer, the Swatch Group’s CEO, Nick Hayek dropped a bombshell via an interview with the Swiss newspaper, NZZ am Sonntag: the group’s 18 brands, which includes Breguet, Blancpain, Longines and Omega as well as Swatch, will not be taking part in the 2019 edition of Baselworld.
It’s hard to overstate the shock that this news is creating, because it will affect the whole business. Do Patek Philippe and Rolex stick with an emasculated trade fair? Can Cartier justify its investment in the rival SIHH? Should smaller brands hope for a better deal from Baselworld?
Hayek’s reasoning is hard to fault even if his language is almost startling in its force and distinctly un-Swiss directness. Referring to the value the group gets from the ￡38 million plus it spends on exhibiting at Baselworld, Hayek said that “annual watch fairs, as they exist today, no longer make much sense.
This does not mean that they should disappear. But it is necessary that they reinvent themselves, responding appropriately to the current situation and demonstrating more dynamism and creativity. At the moment, the trade fairs are failing to do so.
“The MCH Group, which organizes Baselworld, is clearly more concerned with optimizing and amortizing its new building (a ￡308 million extension by Herzog de Meuron opened in 2013) – which, incidentally, is largely financed by the watch industry during the fairs – than it is in having the courage to make real progress and to bring about true and profound changes.” Ouch.
Given that most of the other exhibitors, a number that’s already declined from 1,500 to 700 over the last few years, already thought the Swatch Group were somewhat over-privileged within the show’s organisation, MCH have some questions to answer. As, no doubt, will the electors of Basel and Zurich whose local governments own MCH and who stand to lose tens of millions in visitor revenues should Baselworld shrink any further.
As the industry has been tightening its belt over the last five years and facing up to a more price conscious market, it’s hardly a surprise that Baselworld should also feel the heat. Whether MCH can re-invent the show quickly enough seems open to question.